Paycom Software, Inc.

Good afternoon. My name is Lauren and I'll be your conference operator today. At this time, I would like to welcome everyone to Paycom's third quarter 2025 financial results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there'll be a question and answer session. If you would like to ask a question during this time, simply press star, followed by the number one on the telephone keypad. If you would like to withdraw your question, please press star plus two. I will now turn the call over to James Sanford, Head of Investor Relations. You may begin.

Thank you and welcome to PACOM's earnings conference call for the third quarter of 2025. Certain statements made on this call that are not historical facts, including those related to our future plans, objectives, and expected performance, are forward-looking statements within the meaning of the Private Security Litigation Reform Act of 1995. These forward-looking statements represent our outlook only as of the date of this conference call. While we believe any forward-looking statements made on this call are reasonable, actual results may differ materially because the statements are based on our current expectations and subject to risks and uncertainties. These risks and uncertainties are discussed in our filings with the SEC, including our most recent annual report on Form 10-K. You should refer to and consider these factors when relying on such forward-looking information. Any forward-looking statement made speaks only as of the date on which it is made, and we do not undertake and expressly disclaim any obligation to update or alter our forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by applicable law. Also during today's call, we will refer to certain non-GAAP financial measures, including adjusted EBITDA, non-GAAP net income, and certain adjusted expenses. We use these non-GAAP financial measures to review and assess our performance and for planning purposes. A reconciliation schedule showing GAAP versus non-GAAP results is included in the press release that we issued after the close of the market today and is available on our website at investors.paycom.com. I will now turn the call over to Chad Richardson, Paycom's CEO and President. Chad?

Thanks, James, and thank you to everyone joining our call today. I'll briefly comment on third quarter results and recent product innovations. I'll then turn it over to Bob for a review of our third quarter results and our full year guidance. We will then take questions. Let's get started. Third quarter results came in strong with double digit organic recurring revenue growth and continued margin expansion, setting us up to exceed our full year financial plan for 2025. In addition to strong financials, we also executed the launch of our award-winning and industry-first command-driven AI product, IWANT. Now enabled across our entire client base, IWANT is transforming how our clients and their employees engage with their HR and payroll data. IWANT has already successfully responded to millions of queries from employees, managers, and executives, extending the power of our full solution automation. We are seeing a dramatic uptick in usage, especially among new users, which include the C-suite and newly onboarded employees of our clients. The intuitive nature of IWANT means new employees no longer need training on the system and are able to utilize the full solution upon hire. I'm particularly encouraged by the engagement we are seeing among the C-suite. Traditionally, executives have not been daily users of HCM Solutions. With IWANT, thousands of C-suite executives are already pulling data and insights directly from the Paycom system, and the feedback has been phenomenal. I'm confident that command-driven functionality is the future for all software. Betty is another example of automation that delivers significant ROI and is driving new sales. This award-winning payroll solution reduces payroll processing labor by up to 90%. while also cutting the time spent correcting payroll errors by up to 85%. VETI not only protects employees against insufficient funds by ensuring the payroll is correct prior to payday, it also eliminates human interaction with non-revenue generating tasks associated with voided payments, check reversals, ledger updates, and post payroll adjustments, just to name a few. VETI also enhances payroll compliance, ensuring accurate tax withholding, along with wage and hour accuracy, which reduces employer liability because employees have control over the accuracy of their check. Additionally, automation and perfect payroll with Betty is also attracting former clients back to Paycom. Recently, two clients who were not previous Betty users came back to Paycom thanks to Betty. One of these was a large auto group who, after leaving Paycom, had numerous issues processing multiple payrolls across their more than 25 locations that impacted their employees. They quickly realized the mistake they made and reached out to us to come back. Upon their return, they were quick to adopt Betty because of the payroll automation and paycheck transparency. The second example of an organization returning was a manufacturing company whose employees quickly voiced frustration over the switch away from Paycom, especially managers who lost access to the information they were accustomed to, resulting in a slowdown in revenue-generating work. This organization pointed to Betty as a significant reason for the return and a game-changer with 100% accurate payrolls, thanks to Betty identifying and notifying employees of items that need attention prior to payday. Betty continues to be a powerful differentiator for us in the market as we continue to drive even more automation and deliver very strong ROI to our clients. To facilitate the automation experience, including IWANT and future AI developments in the pipeline, we significantly expanded our data center capabilities, spending roughly 100 million of AI-focused CapEx on our Phoenix and Oklahoma City data centers. We front-loaded this CapEx to match the timing of our IWANT rollout in Q3. Owning and operating advanced data centers is a sustainable competitive advantage for PACOM, particularly for clients who have reservations about opening up their critical data to external LLMs. IWANT, hosted by PACOM, only draws from PACOM's single database, which eliminates conflicts created by inconsistent or duplicative external data sets, significantly improving data integrity and the quality of the user experience. Thanks to our product innovation and our focus on world-class service, client satisfaction trends remain strong. We provide high-touch personal service, and our clients appreciate our service levels now more than ever. We complement our high-touch service model with full solution automation, which drives service operation efficiency. As a result, we've seen a 20% to 30% year-over-year decline in internal tickets and inbound client call volume. These are positive influencers on client satisfaction. With our strong third quarter results and the outlook for the remainder of 2025, we are set to deliver a milestone year with over $2 billion in total revenues, all through organic growth and near record level adjusted EBITDA margins. Paycom has been leading our industry in innovation and client ROI achievement since we were founded. Now, with automated products like iWant, Betty, and Gone, we are well positioned for continued strong performance in the future. I want to thank all of our employees for their consistent contribution to Paycom's success and also thank our clients for trusting us to deliver unmatched value through full solution automation. With that, let me turn it over to Bob.